Justyna Topczewska, Director of MVNO Nation, conducted an interview with Michel Zwijnenberg, who has been specialising in eSIM and IoT across different companies, ranging from MVNOs and MVNEs to operators and everything in between. They discussed the impact of eSIM, how it changes the dynamics between MVNOs and operators, and how their relationship can evolve in the future.
Justyna Topczewska, Director, MVNO Nation (JT): Could you please tell us about yourself and your involvement with eSIM?
Michel Zwijnenberg, Industry Expert specialising in eSIM & IoT (MZ): I am Michel Zweijneberg, and I see myself as an entrepreneur and industry expert in IoT and eSIM, having worked extensively with both for a very long time. I am inherently curious, constantly engaging with industry peers, and driven by a passion for asking probing questions. My journey with eSIM technology began approximately nine years ago while I was the owner of a Dutch MVNE called Aspider, where I initiated one of the first RFPs for M2M RSP or M2M eSIM, which was pioneering at that time.
After selling Aspider, I transitioned into consulting, specialising in consumer eSIM projects. I played a key role in the inception of Dent, a travel-focused eSIM MVNO. For the past two and a half years, I've served as a consultant for T- Mobile Netherlands, focusing on IoT and eSIM initiatives, starting from strategy development through to successful implementation. This progression marked a significant career milestone, culminating in translating strategic visions into tangible outcomes, including turning conceptual PowerPoint presentations into practical realities.
JT: As you've been exposed to different companies and had different experiences with eSIM, tell us, from your perspective, where you see the biggest impact of eSIM technology on traditional MVNO business models.
MZ: My background includes launching or assisting in the launch of around 30 to 40 MVNOs with Aspider. I've encountered various flavors of MVNOs, but the most significant impact has been on travel MVNOs. While we were already present in this sector for a long time, previously, physical SIM cards were necessary. Now, with eSIMs, downloadable SIM cards are possible, extending the opportunities further.
I believe the future of travel MVNOs lies beyond traditional models. For instance, the recent launch of the eSIM travel service by Revolut and its partnership with global providers like Truphone exemplify this shift. I am more inclined towards models where multiple brands collaborate to build robust distribution networks and establish their own MVNO identity.
JT: Has eSIM had any influence on the companies you directly worked with? Did you have to implement eSIM yourself in those companies, or was it client-related as you explained earlier?
MZ: The end result is always project-based, so I've worked on projects to implement eSIM solutions for my own company back then, M2M, as well as for consumer eSIM for Dent, and for other MVNOs. At T-Mobile Netherlands, now called Odido, my role shifted more towards the strategy side, focusing on how operators should approach eSIM for indirect channels—not for the B2C part, but rather for the B2B aspect of the operator model.
JT: Could you please share your take on how the competitive landscape has changed for MVNOs, operators, and others involved, now that eSIM is in the mix?
MZ: When I speak with operators and ask if they've noticed a decline in roaming revenue due to eSIM providers, they generally say no, though they acknowledge it might be happening on a small scale that hasn't yet made a significant impact. However, they are aware that changes are coming. Looking at the competitive market, we currently see the rise of travel eSIM MVNOs, but in the coming years, MNOs are expected to respond to protect their own roaming revenue. One logical approach I've heard is for Europe to expand the "Roam Like at Home" principle to include popular travel destinations such as the US or Thailand, thereby incorporating these countries into their domestic bundles and eliminating the need for subscribers to download local eSIMs primarily for cost savings reasons.
JT: So, in your opinion, operators won't necessarily adopt eSIM; instead, they will rely on their existing or new roaming agreements to counteract the emerging travel eSIM MVNOs?
MZ: If I consider the MNO's perspective, on one hand, they aim to safeguard their current roaming revenues. On the other hand, they also seek to capture a share of the market from the emerging travel MVNOs. Finding a balance between these objectives is crucial for them. One approach to protect their revenue could be expanding the "Roam Like at Home" concept. This approach, among others, seems logical and practical based on discussions I've encountered.
JT: Do you anticipate increased competition or more collaboration in response to this? Given the various strategies operators can employ, do you think some might opt to partner with these travel MVNOs or possibly pursue mergers or acquisitions? What are your thoughts on that?
MZ: There will be cooperation due to what I refer to as the "prisoner's dilemma" within the ecosystem, particularly in Europe, which has grown increasingly complex and large with numerous operators, specialised roaming aggregators, and eSIM providers alongside MVNOs. Given these diverse stakeholders, MVNOs will inevitably find ways to access travel eSIMs. This trend is unstoppable, necessitating cooperation. I believe there's no alternative. Naturally, not all operators will act simultaneously; some will move early, while others may delay. Ultimately, due to this dilemma, they will have no choice but to collaborate with MVNOs to gain access while safeguarding their revenue from existing customers.
JT: From the perspective of MVNOs, they are aware that operators may see them as potential competitors. So, how should they negotiate and communicate with MNOs if they are launching an eSIM-specific MVNO for travel? How should they approach this?
MZ: The starting point in any MVNO discussion with an MNO is typically the ability to bring business that the operator could not otherwise target themselves. In the case of Europe, for example, if an MVNO collaborates with a European MNO to access its roaming agreements, it could potentially target all travellers coming to Europe. This widens the exposure for the MVNO while the operator's potential loss is limited to travellers landing in their own country. This presents a positive argument for the operator, highlighting the broader market reach facilitated by the MVNO. Due to the prisoner's dilemma scenario, cooperation becomes inevitable for operators. The challenge lies in identifying the operators most open to collaboration, often those from smaller countries or not holding the dominant market position.
JT: From the operator's perspective, putting yourself in their shoes, what advice would you give operators when facing these new MVNOs entering the market?
MZ: If I were an operator, I would always offer travel eSIMs in my home country. So, if you're a French operator, I would ensure that my travel eSIMs are available at airports or with French airlines for people flying to or within France because that makes a lot of sense. Additionally, I would protect my revenue with my own subscribers. For instance, I would expand the "Roam like at home" footprint to include popular travel destinations like the US. For France, this could also involve adding other former French colonies to this home-like roaming service.
The third strategy would be to cooperate with a selected number of travel MVNOs to stay informed about developments in that market. I would choose a few high-potential MVNOs and make them key partners to explore this venture. However, I would advise against opening up completely to all travel MVNOs. It's better to select several promising ones, learn from the experience, and then reevaluate the next steps. That's my advice; there are many possible approaches and considerations involved in this decision.
JT: My last question is about roaming, you mentioned earlier that you anticipate some changes. When do you think these changes will start taking place, and what specific changes do you foresee?
MZ: I believe that ultimately, eSIM will gradually drive down roaming prices because it offers an alternative to downloading local eSIM profiles. However, for this to happen, operators need to acknowledge that eSIM is beginning to impact their roaming revenue, although it hasn't yet reached a critical point. If this trend continues, it will inevitably lead to reduced roaming prices. Another potential development, similar to what we've seen with 5G standards, could be the introduction of local breakout features even when roaming. This would benefit operators by allowing business clients to access local latencies for applications like video conferencing while using their home operator's profile.
JT: Let's dive into some of the audience's questions. Do you envision a world where people primarily purchase their domestic eSIM from travel brands rather than MVNOs? Is travel just the tip of the iceberg, or is it just the beginning?
MZ: That's an interesting question about the impact of eSIM on MVNOs. It's a huge opportunity, especially for purely digital MVNOs, which aligns well with what I mentioned earlier about Revolut, a digital service. There's a great opportunity to combine these aspects and utilise these distribution channels. I'm convinced this sector will grow.
Moreover, while I've primarily focused on consumer eSIM for travel, which is already a significant topic, another area where eSIM will have a major impact, in my opinion, is IoT eSIM. The upcoming standard SGP.31/32 will likely drive substantial developments in this area in the coming years.
JT: And finally, to wrap it up, I find this question quite intriguing. We've extensively discussed roaming and the cooperation between operators and MVNOs. However, this question raises an interesting point about the role of satellite technology. Do you believe satellite technology will eventually surpass traditional telecom providers in data and roaming technologies?
MZ: That's actually an interesting question because it's unfolding right now. As with all questions about different connectivity technologies, the answer ultimately depends on the specific use case. Here in the Netherlands, we're quite fortunate with excellent coverage, widespread 5G availability, and affordable unlimited data plans. However, in countries with less coverage or higher airtime costs, satellite technology holds significant potential.
Absolutely, thank you very much. This topic is also a focal point at our MVNO Nation Live Africa event, where we're discussing connectivity in rural and remote areas. Satellite technology can play a crucial role in extending connectivity to these underserved regions.
Key takeaways: eSIM is reshaping the telco ecosystem on the consumer side through the growth of eSIM travel MVNOs and will continue to impact the IoT business once the new eSIM IoT standards take off. Regarding the relationship between MVNOs and operators, it is believed that eSIM will gradually drive down roaming prices. However, at the moment, operators do not see eSIM’s impact on their roaming revenue.